G C Lobster Ltd. v. B Atkinson Boat Builders Limited, 2019 NSSC 342

Supreme Court of Nova Scotia Citation: G C Lobster Ltd. v. B Atkinson Boat Builders Limited , 2019 NSSC 342 Date: 20191119 Docket: Yarmouth No. 457379 Registry: Yarmouth Between: G C LOBSTER LTD. Plaintiff v. B ATKINSON BOATBUILDERS LIMITED Defendant Library Heading Judge: The Honourable Justice Pierre L. Muise Heard: March 4 and 5, 2019 in Yarmouth and Annapolis Royal, Nova Scotia Final Written Submissions: April 15, 2019 Written Decision: November 19, 2019

Summary: GC contracted with Atkinson to have a fishing vessel built. The written quote did not express a completion date. GC alleged one had been agreed upon. During construction a dispute arose over the stern extension. Atkinson said it was strong enough for lobster fishing but not scallop dragging. It had not anticipated the vessel would be used for scallop dragging. It asked GC to sign a waiver of Atkinson’s liability for the extension if the vessel was used for dragging.

On the day the vessel was to be transported to the water, GC refused to sign the waiver and Atkinson refused to deliver the vessel to the water and complete construction. There was a heated exchange in which Carl, the father of the owner of GC (Garrett), aggressively told the owner of Atkinson (Thelbert) not to touch the vessel. He also signed the waiver either before or after that heated exchange. GC took control of the vessel. GC ultimately brought it to the water, completed it and fixed alleged deficiencies, without assistance from Atkinson.

During that time: Atkinson posted signs saying Garrett owed it money; Garrett made foul gestures towards Thelbert; and, Carl assaulted Thelbert.

Issues:

(1) How credible and reliable are the witnesses?

(2) Did the contract specify a completion date?

(3) If not, what was a reasonable time for completion?

(4) Who, if anyone, breached the contract?

(5) Did any breaches amount to repudiation or mutual repudiation?

(6) Did GC waive any claim related to the extension?

(7) What amounts should be added to the contract price for extras or expenditures Atkinson wasted because of GC’s actions?

(8) What amounts should be deducted from the contract price for owner supplied, diminished or uncompleted items?

(9) Was Atkinson negligent in the construction of the vessel?

(10) Is GC barred from claiming damages for deficiencies?

(11) What, if any, were the deficiencies in the construction of the vessel?

(12) Does the delay in construction entitle GC to compensation for the lease of a vessel?

(13) What, if any, general damages is GC entitled to?

(14) What amount, if any, is owing from one party to the other? Result: The contract did not specify a completion date. Atkinson would have completed the vessel within a reasonable time if the relationship between the parties had not disintegrated and prevented it from having access to the vessel. Both parties breached the contract. None of the breaches, in the circumstances, were fundamental breaches. However, the parties, by their conduct, mutually repudiated the contract. Carl signing the waiver did not result in GC waiving any claim related to the extension.

GC was not barred from claiming deficiencies merely because it had not asked Atkinson to remedy them or had not fixed some of them. The circumstances made it unreasonable to expect GC to ask Atkinson to fix the deficiencies and GC was entitled to credit for substandard items. GC did not prove negligence. It proved breach of contract in relation to the extension. It was not entitled to general damages. 10% of the contract price remained to be paid.

That was $37,870. less the $7,902.75 GC had paid for extras, leaving $29,967.25 owing on the initial contract price. $5,853.92 was added to the contract price for extras and $36,583.69 was deducted for credits and deficiencies. That left Atkinson owing GC a balance of $762.52. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. SUPREME COURT OF Nova Scotia Citation: G C Lobster Ltd. v. B Atkinson Boat Builders Limited , 2019 NSSC 342 Date: 20191119 Docket: Yarmouth , No. 457379 Registry: Yarmouth Between: G C LOBSTER LTD. Plaintiff v.

B ATKINSON BOATBUILDERS LIMITED Defendant

Revised Decision: The decision has been corrected in accordance with the attached Erratum dated February 3, 2020. Judge: The Honourable Justice Pierre L. Muise Heard: March 4 and 5, 2019, in Yarmouth and Annapolis Royal, Nova Scotia Final Written Submissions: April 15, 2019 Counsel: Gregory Barro, Q.C., for the Plaintiff Richard Norman, for the Defendant INTRODUCTION [ 1 ] GC Lobster Ltd. (“GC”) and B Atkinson Boatbuilders Limited (“Atkinson”) entered into a contract under which Atkinson was to build a fishing vessel for GC.

The Vessel was ultimately named “Have a Look at It”. [ 2 ] A written quote outlined the specifications, purchase price, payment schedule, and that there would be an additional cost for extras. It did not express a completion date. [ 3 ] GC alleges that a completion date of March 1, 2016 was agreed upon. Atkinson denies that, stating it did not agree to any completion deadline. [ 4 ] During construction a dispute arose regarding the extension attached to the aft of the vessel. GC wanted Atkinson to strengthen it.

Atkinson took the position that it was strong enough for lobster fishing and other fisheries commonly pursued in the area; but, not scallop dragging. It requested that GC sign a waiver of liability in relation to the extension. It said it did so after having learned that GC intended to use the vessel for scallop dragging. [ 5 ] Atkinson had arranged for the vessel to be transported to water on June 8, 2016. However, that day, GC’s principal, Garrett Cottreau (‘Garrett”), refused to sign the waiver presented to him by Atkinson’s principal, Thelbert Smith (“Thelbert”).

Thelbert refused to transport the vessel to water and complete construction without the waiver being signed. [ 6 ] Thelbert directed the truck driver to bring the vessel back to the Atkinson boat shop. Garrett intervened and threatened to sue the truck driver if he brought the boat back to the shop. [ 7 ] There was a heated exchange in which Garrett Cottreau’s father, Carl Cottreau (“Carl”), became aggressive, and told Thelbert not to touch his son’s boat. [ 8 ] At some point, Carl signed the waiver, though he is not a principal or owner of GC.

Ultimately, the vessel remained where it was, in the parking lot next to Atkinson’s boat shop. [ 9 ] GC arranged for it to be transported to the water. [ 10 ] There was a subsequent confrontation at the wharf where the vessel was located in which Carl grabbed Thelbert by the throat, threw a punch which he did not complete, then spit in his face. [ 11 ] There is some vessel construction work that must be completed when a vessel is in the water. GC completed all that work without assistance from Atkinson.

It also effected changes to allegedly remedy deficiencies. [ 12 ] It brought the within action seeking: the cost of completing the construction; the cost of remedying deficiencies; deductions from the agreed purchase price due to various construction or equipment items allegedly being of lesser quality than agreed upon, or provided by GC; the cost of transporting the vessel to the water; the cost of leasing a vessel between March 1, 2016 and the date the vessel was ready to use; and, general damages for anxiety and distress, arising from Atkinson’s breach of contract and negligence. [ 13 ] Atkinson defended and counterclaimed for the remainder of the purchase price owing less the value of the work remaining to be completed at the wharf.

ISSUES [ 14 ] This case raises the following issues: 1. How credible and reliable are the witnesses? 2. Did the contract specify a completion date? 3. If not, what was a reasonable time for completion?

4. Who, if anyone, breached the contract? 5. Did any breaches amount to repudiation or mutual repudiation? 6. Did GC waive any claim related to the extension? 7. What amounts should be added to the contract price for extras or expenditures Atkinson wasted because of GC’s actions? 8. What amounts should be deducted from the contract price for owner supplied, diminished or uncompleted items? 9. Was Atkinson negligent in the construction of the vessel? 10. Is GC barred from claiming damages for deficiencies? 11. What, if any, were the deficiencies in the construction of the vessel? 12.

Does the delay in construction entitle GC to compensation for the lease of a vessel? 13. What, if any, general damages is GC entitled to? 14. What amount, if any, is owing from one party to the other? LAW AND ANALYSIS ISSUE 1: HOW CREDIBLE AND RELIABLE ARE THE WITNESSES? Garrett Cottreau [ 15 ] Garrett Cottreau gave his evidence in a straightforward and un-evasive manner. He readily conceded points against interest. He was generally consistent in his evidence. He maintained proper behaviour, attitude and demeanour.

That did not change from direct examination to cross-examination. [ 16 ] He was testifying in relation to the first fishing vessel he had built, making it such that he would be more likely to take note of, and remember, specific points. [ 17 ] However, he is the sole owner and president of the plaintiff company, GC. As such, his perception and recollection would likely be influenced by bias. Also, he was not dedicating his entire time to the issues relating to the construction of his vessel. He was actively pursuing the lobster fishery, including during its busiest time.

There were some inconsistencies in his evidence. Carl Cottreau [ 18 ] The comments made in relation to Garrett also apply to Carl Cottreau, except that, at the very beginning of cross-examination, he took on a defensive air and made somewhat flippant remarks. Also, his bias arises from his status as Garrett’s father who was intimately involved in the process of having the vessel built by Atkinson. [ 19 ] GC’s vessel was not the first vessel construction with which he had involvement. He had owned fishing vessels for many years. He had worked in a boat shop.

Atkinson completed a vessel for him shortly before starting construction on GC’s vessel. That makes it such that the process may not make as a strong an impression upon him as it would upon Garrett. Joyce Smith [ 20 ] Joyce Smith gave her evidence in a straightforward un-evasive manner. She maintained appropriate demeanour, attitude and behaviour throughout. It did not change from direct examination to cross-examination.

There were no internal inconsistencies in her evidence; but, it was relatively brief, thus diminishing the opportunity for inconsistencies. [ 21 ] The event she witnessed and testified to was sufficiently hostile to cause her to commence videotaping. Thus, it would have left an impression upon her. [ 22 ] On the other hand, she is the wife of Thelbert Smith, who is the owner of Atkinson, and she is a full-time employee of Atkinson. That raises a concern regarding bias in perception,

interpretation and recollection of events. Thelbert Smith [ 23 ] There is no evidence that, during the negotiations for, and construction of, the Have a Look at It, Thelbert was involved in any other type of work. His focus was on GC’s vessel and the other vessel he was building. This was only the third vessel Atkinson was building since he took over the business. [ 24 ] He generally gave his evidence in a straightforward, un-evasive fashion, and maintained proper behaviour, attitude and demeanor.

He made multiple admissions against interest. [ 25 ] However, occasionally, he was unclear, vague, evasive, or flippant. He also became somewhat agitated during part of the cross- examination. There were some internal inconsistencies in his evidence, and some inconsistencies between his evidence at trial and earlier statements he had made.

[ 26 ] He is the owner of Atkinson. That bias likely influenced his perception and recollection. Conclusion Regarding lay Witnesses [ 27 ] Considering the credibility and reliability factors as a whole, all lay witnesses were generally credible and reliable. Where their evidence conflicted, determining the facts will involve primarily an assessment of: whether the evidence on a particular point made sense in the circumstances; and, any inconsistency or vagueness in such evidence. I will conduct that assessment in discussing individual points or issues.

Jameson Theriault’s Expert Opinion Evidence [ 28 ] Jameson Theriault was qualified as an expert in the field of marine surveying, “capable of giving opinion evidence on the subject of the construction and cost of vessels”. [ 29 ] Multiple points diminish the credibility and reliability of his evidence. [ 30 ] A lot of the information which Mr. Theriault used as the basis for his report, including the cost of materials and services, came from Garrett and/or Carl, without independent verification.

He did not clearly specify that in his report, creating a somewhat distorted impression regarding the independence of his sources. [ 31 ] He attempted to explain away that omission by testifying that he considered Garrett and Carl to be industry professionals, and he considered Carl to be a third party industry professional. His point was that they would fit within the category of “third-party industry professional” referred to in

section 4.1 of his report. Even though GC is legally a different person than Garrett and Carl, it is somewhat misleading to consider them to be third parties as Garrett is the sole owner and principal of GC, and Carl is Garrett’s father. They could not be said to be independent third parties. [ 32 ] Even third party quotes he relied upon, such as the third-party estimate provided by Greg Symonds Boatbuilders Ltd., were not provided directly to him. They were provided to Garrett. There is no evidence regarding the circumstances or specifics of the request for those estimates.

The persons providing the estimates did not testify. Therefore, they are of unknown reliability. [ 33 ] In addition, it is reasonable to expect that a boatbuilder’s estimate for various individual items would result in a higher price than their

part in a global vessel construction price. [ 34 ] He did not speak to Thelbert Smith or anyone on behalf of Atkinson. [ 35 ] He used the MV Lieutenant Dan as a comparator vessel even though it was a Canada Steamship Class vessel and GC’s vessel, the MV Have a Look at It, was not. [ 36 ] When it was a first suggested to him that they were in different classes he responded somewhat evasively by stating it depended on how you looked at it. He then agreed that the Lieutenant Dan was steamship class and the vessel in question was not.

He agreed that a steamship class vessel requires an additional Transport Canada inspection. [ 37 ] In comparing the two vessels he assumed that the cabin in the slaughterhouse area on the Lieutenant Dan had been constructed by Atkinson, as part of the original construction. In fact, it had been built by Carl after taking delivery of the completed vessel from Atkinson. [ 38 ] He was evasive and somewhat argumentative at times. [ 39 ] He gave opinions on various points which he acknowledged on cross-examination were erroneous or unfounded.

That negatively affected the reliability of his evidence. [ 40 ] However, Mr. Theriault had no prior connection with Garrett or GC. Garrett did not know who he was. He secured his services on the suggestion of a third party. That bolsters the credibility and reliability of his evidence. [ 41 ] Though he made errors in his initial report, he was able to concede that certain discrepancies noted in his report ought not be shown as discrepancies. That bolsters his credibility.

ISSUE 2: DID THE CONTRACT SPECIFY A COMPLETION DATE? [ 42 ] Garrett and Carl met with Thelbert and discussed having a fishing vessel built for GC by Atkinson. Based on information provided by them regarding the specifications for the vessel, he prepared a written quote on behalf of Atkinson and sent it to Garrett. It indicated the price Atkinson was offering and that it was based on the items they had discussed up to that time. It listed those items and set out the payment schedule.

Garrett accepted the offer on behalf of GC. [ 43 ] There is no dispute that the written offer does not specify a completion date. [ 44 ] The question is whether a completion date was otherwise agreed upon as part of the vessel construction contract between GC and Atkinson. [ 45 ] For it to have been agreed upon when the contract was formed, the parties would have had to have, through their words or actions, made it plain and clear that that a specific completion deadline was intended: Fridman, The law of Contract in Canada , Fifth Edition (Toronto: Carswell, 2006), pp. 17-18. [ 46 ] Arthur Anderson Inc. v.

Toronto Dominion Bank , 1994 CarswellOnt 233 (C.A.), at para 18 , states:

“First, the words of the contract must be analyzed ‘in its factual matrix’, and a conclusion arrived at that there are two possible

interpretations of the contract. Then, and only then, may the trial judge look at other facts, including facts leading up to the making of the agreement, circumstances existing at the time the agreement was made, and evidence of subsequent conduct of the parties to the agreement.” [ 47 ] As indicated, the quote does not specify a completion date. In addition, the payment

schedule is determined in accordance with various specified stages of construction, with the 20% balance being due upon completion of the vessel construction and sea trials. Therefore, the written quote, by itself, does not support two possible

interpretations regarding a specified completion deadline. [ 48 ] However, in the case at hand, GC did not sign its acceptance to the written offer. It communicated its acceptance orally. In addition, the written quote does not state that it is the entire agreement. Further, a court may consider the contract document or extrinsic evidence to fill a void or decide whether that void was intended: Clearwater Well Drilling Ltd. v.

Wong , 1987 CarswellNS 117 (S.C., T.D.), at paras 37 to 40 . [ 49 ] Therefore, despite there being no ambiguity in the written quote, it is appropriate to consider whether there was agreement on a delivery date prior to acceptance of the written quote, such that the Court should fill in a completion date on the basis that it would have been intended by the parties. [ 50 ] Garrett provided the following evidence on the point. [ 51 ] He first met Thelbert in March or April 2015, when they discussed having Atkinson build a fishing vessel for him.

Following those discussions, Thelbert prepared the quote in Tab 1, of Exhibit 1. Garrett received it on or about April 14, 2015. [ 52 ] They kept discussing the terms of the contract. Garrett informed Thelbert he was leasing a boat and needed his new vessel to be completed by March 1. In addition, March is a slow part of the lobster season.

Obtaining the vessel then would give him a chance to try it out before the fishery got busy in April and May. [ 53 ] They agreed and shook on March 1, 2016 being a reasonable time. [ 54 ] They also agreed that the construction was to start when the hull was delivered to Atkinson’s boat shop, which he said was expected to be just before the lobster season which is at the end of November. [ 55 ] He had the option of having included, in the written quote, a written delivery date, but did not do so. [ 56 ] When it was suggested to Garrett that Thelbert never provided a certain or guaranteed completion date, Garrett responded as follows.

He first stated it would be done by March 1. Then he said it would be March 15. After that, he became more vague, stating that he needed “a couple more weeks”, or needed more time. [ 57 ] At another point in cross-examination, he said he communicated to Thelbert that it would be nice to have the vessel sometime around March. He suggested “roughly” March 1. Thelbert responded that the vessel “would” be done roughly around then. [ 58 ] This was inconsistent with his evidence of a firm completion date being agreed upon.

Even accompanied by the word “would”, the word “roughly” conveys flexibility as to the completion date. The discussion described presents as being more consistent with a rough estimate of when the vessel “should” be done. [ 59 ] Carl provided the following evidence on the point. [ 60 ] Thelbert told them that he “should” be able to have the boat finished by March 1.

In response to a question regarding whether it “could” be finished by March 1, “or thereabouts”, Thelbert responded that it “could”. [ 61 ] That is much less definite than much of Garrett’s evidence on the point. [ 62 ] The “Hard to Believe” which Carl owned, and Garrett had been leasing, was sold in July 2015. He agreed on a closing date of March 1, 2016. Ultimately it was extended to March 15. However, they could not extend it any further. [ 63 ] July 2015 is three months after the formation of the contract between GC and Atkinson for the construction of the vessel in the case at hand.

Therefore, the March 1 completion date could not have arisen from March 1 being the closing date. It could only be that the March 1 closing date arose from a confirmed, anticipated or assumed completion date. [ 64 ] Thelbert provided the following evidence on the point. [ 65 ] In April 2015, he met with Garrett and Carl regarding what Garrett wanted for a boat and what he would supply. Carl was leading the discussion. [ 66 ] He believes they asked when the hull would be ready.

However, he had no control over that as it was being made in a third- party business. [ 67 ] There was no discussion in April 2015 regarding a delivery date. They did not say when they needed or wanted the vessel. [ 68 ] Neither Carl or Garrett told him Carl had sold his boat. So, Garrett saying he needed to lease a boat did not indicate he needed the vessel completed by March because Garrett had his father’s boat. [ 69 ] He does not promise delivery dates because there are too many changes and difficulties in obtaining supplies that can happen and cause delay.

[ 70 ] He agreed that he shook hands with Garrett. However, it was not on a delivery date. It was only on the agreement to build the vessel. [ 71 ] He provided the quote dated April 14, 2015, after they had agreed to the price. That is supported by the fact that the initial deposit cheque from GC, in the amount of $10,000, is dated April 10, 2015, i.e. before the quote. [ 72 ] I accept that Thelbert expressed, as part of early discussions, in April 2015, that the vessel “should” be finished March 1, 2016 “or thereabouts”.

However, at that point he would not have known when he would receive the hull which was being constructed by a third party. He only received it in December 2015. It takes his shop 5 to 6 months or more from receipt of the hull to complete a vessel, depending on the circumstances. Having received the hull in December, that would bring him to June in usual circumstances.

Atkinson faced certain unexpected challenges which I will discuss later, and which caused some delay. [ 73 ] In the circumstances, Thelbert’s expression of a “should be completed” date, more likely than not, would only have been a guess, and was not intended by Atkinson to be a term of the of the contract. [ 74 ] The most plausible situation is, as testified by Thelbert, that no completion date was agreed upon. [ 75 ] Further, even if I had found that there was agreement that the vessel “should” be completed March 1, 2016 “or thereabouts”, that would have been a vague completion date. [ 76 ] A vague term is unenforceable and, if the rest of the contract is capable of enforcement without that term, the vague term is to be removed and the contract interpreted without it: Boult Enterprises Ltd. v.

Bissett , 1985 CarswellBC 322(C.A.) . Therefore, the completion date agreed upon would have to be a clear one to be enforceable. ISSUE 3: IF NOT, WHAT WAS A REASONABLE TIME FOR COMPLETION? [ 77 ] Where no date for completion is specified in the contract, there is an implied term that is must be within a reasonable time: Heintzman and Goldsmith on Canadian Building Contracts , Fifth Edition, (Toronto: © 2016, 2017, 2019 Thomson Reuters Canada Limited), ch 4 at 7(d)(iii)(D) (Thompson Reuters eLooseleaf Library). [ 78 ] The same

section of Canadian Building Contracts states: “The reasonable time to complete will not be determined in the abstract but having regard to all the circumstances, including discussions during negotiations about the time for completion, delays by the owner, site and weather conditions, unusual shortages of workers or supplies, the timing of work by other subcontractors, whether or not the parties intended that the contractor be devoted exclusively to the particular project and whether the contractor acted with reasonable dispatch to become qualified to undertake the project … . ” [ 79 ] It also states that, if the parties allow the completion date “to pass by with the apparent understanding that the contract is to be completed later, then there is an implied term that a reasonable period of time will then be allowed for completion”. [ 80 ] In the case at hand, the following factors inform the inquiry into what was a reasonable time for completion. [ 81 ] Atkinson provided an early rough estimate that the vessel should be completed by March 1 or thereabouts. [ 82 ] However, it could not start the construction until it received the hull.

It was being built by a third party. Atkinson had no control over the delivery date. [ 83 ] As Thelbert testified, and I accept, Atkinson tries to build two vessels per year and it usually takes 5 to 6 months to build one, from the date of delivery of the hull. [ 84 ] He further testified that the hull arrived around December 11, 2015.

That is supported by the cheque dated December 11, 2015 from GC in the amount of $41,675, which he stated was the second payment for the hull, the first one having been dated September 10, 2015, around when the hull construction would have began, and having been in the amount of $43,000. It is further supported by the “2 nd Instalment” invoice dated January 21, 2016, which was the invoice for when the tanks had been installed and the engine was on the beds.

That date, considering his evidence regarding the overall construction time, appears consistent with the time required to reach that stage after receipt of the hull. Therefore, I accept the hull was delivered December 11, 2015. [ 85 ] At that point, they had another boat in the shop, on which they had the decks and wheelhouse started. [ 86 ] Garrett testified that after the second installment in January 2016 the progress slowed to almost nothing. Some days they were working on other boats, not his. He did not specify where. If he meant in the shop, it could only have been one other boat.

Garrett knew that Atkinson would have two vessels under construction in its shop. He ought to have known there were times when the crew would be focussing on one and not the other. In addition, the other would have been already started before GC’s hull arrived. Thelbert testified, and I accept, that they prioritize the vessel in a more advanced state of completion. That is reasonable. [ 87 ] Thelbert testified that Atkinson had Ricky Kinney working on GC’s vessel. He described him as a well-known boatbuilder that did their finish work and fine carpentry.

One day, while he was working on GC’s vessel, Carl and Garrett showed up and told him that he was working on the wrong boat and that he was supposed to be on the boat up ahead. After that, he refused to work on GC’s vessel because he could not see eye to eye with Carl. He told Thelbert he would quit if he had to work on the vessel. That slowed construction. This evidence was unchallenged and uncontested. I accept it.

It establishes that GC interfered with and slowed the construction. [ 88 ] Thelbert testified that, as the build was taking place during the lobster season, it was hard to keep workers and to find workers. During that time, workers tend to leave them “hanging on land”. That makes sense and I accept it.

[ 89 ] Garrett testified that he suggested that Atkinson hire his friend, Jim Wickens, a carpenter, to work on the vessel. He worked for 2 or 3 days and Thelbert sent him away, on the premise that there was no lumber to build with. That portion is obviously hearsay and unsubstantiated. It is also contradicted by Thelbert. [ 90 ] Thelbert testified that, since Garrett told him Jim Wickens was a carpenter, he thought that he might be handy to have. So, he agreed he could come work with Atkinson’s crew.

The first day he came he lasted until 3 PM and said he had to go look after something and would not be back that day. The next day he arrived at 10 AM and said he had to go look after his employment insurance. He never saw him after that. I accept Thelbert’s evidence on the point. It makes the most sense and shows that Atkinson did not take the unreasonable steps alleged. [ 91 ] Garrett testified he complained to Thelbert, “several times per week” about the slow progress on his vessel. [ 92 ] Thelbert testified that Garrett and Carl did not complain about the pace of the progress on the vessel.

Around the last of March or April they were in the middle of the under-deck work, during which you cannot see any progress for about one month. He does not recall them raising any concern in March 2016. He only recalls Garrett mentioning that he was leasing another vessel because his father was selling his vessel. That last

part is inconsistent with the evidence he gave that he had not been told Carl was selling his boat. [ 93 ] Though Garrett’s comments may not have been properly characterized as “complaining”, I find that, more likely than not, Garrett did comment at least on his perception that the vessel construction was progressing at a slow pace. [ 94 ] Garrett said that, at first, Thelbert assured him the vessel would be done for March 1. However, as March 1 approached, it became apparent that the vessel would not be completed. That is when his father requested a two-week extension to the closing of the sale of his vessel.

Garrett said that Thelbert had indicated he needed till March 15. After that, he made statements that he needed “a couple more weeks” or needed more time. [ 95 ] I have already found that Thelbert did not promise a March 1 completion date. For the same reasons, I cannot accept he assured Garrett the vessel would be finished by March 1. Also, more likely than not, the March 15 or two-week extension was more likely to have been wishful thinking on Garrett’s part than a deadline promised by Thelbert. I say that because of Carl’s evidence that March 15 was as late as the buyer of his vessel would extend the closing.

I do accept that Thelbert said he needed more time. [ 96 ] GC paid the March 3, 2016 invoice for the 4 th installment, even though it was frustrated the build was taking so long, and there was still a lot of work to do. It did so by cheque dated March 22, 2016. [ 97 ] Garrett testified that, not long after, he had a conversation with Thelbert regarding leasing a vessel. He said he informed Thelbert that his father had extended the closing date for the sale of his vessel two weeks. After that, GC would need a boat. Garrett asked if he should lease a vessel for one month.

Thelbert assured him that would be sufficient as the boat would be done by the end of the month. [ 98 ] Even if there had been a promised March 1 completion date, the March 22 payment would show an apparent understanding that the contract would be completed later within a reasonable time. The comment that there was still a lot of work to do, combined with the usual construction time of 5 to 6 months, and the staffing issues, shows that the end of the month would not reasonably be sufficient time.

Therefore, I cannot accept that Thelbert promised an end-of-the-month completion date. [ 99 ] Garrett testified as follows. Near the end of the lobster season, Thelbert told him he could not continue working on the boat because Atkinson had run out of money. They needed to be paid half of the final 20% for them to continue working. GC agreed, in exchange for Atkinson signing over the rights to the boat by way of the Builder’s Certificate. That would facilitate GC getting an early start on the paperwork and approvals required for the vessel.

GC paid ½ of that final 20% by cheque dated May 25or 26, 2016, in the amount of $45,772.75. Garrett testified that, at that point, he thought the vessel would be completed between May 29 and 31, because Thelbert assured him it would be ready in time for him to land his lobster traps. That completion time does not make sense, as the time was too short given all that remained to be done.

Garrett’s advance payment, again, shows an understanding that the contract would be completed later. [ 100 ] Garrett testified that he never said to Thelbert that Atkinson was in breach of the contract, because he was trying to be as helpful as possible. He did say that he told Thelbert that the contract date had been missed. Garrett’s comments that he was trying to be as helpful as possible, more likely than not, explains why he may feel he communicated certain things to Thelbert that Thelbert does not agree were communicated.

Garrett was being accommodating, instead of demanding. [ 101 ] Atkinson’s principal, Thelbert, had many years of experience and was already a Certified Boatbuilder, and recognized by the province of Nova Scotia as a professional boatbuilder. He was part of the team of workers that directly participated in the construction of GC’s vessel. Therefore, he did not waste any time becoming qualified. [ 102 ] On June 8 Atkinson had the vessel to a point where, in two days, as Thelbert testified, it could have the vessel finished. It took Garrett and Carl much longer.

However, they had to arrange for trucking and permits, they were involved in pursuing other fishing related activities, and there were only two of them. Atkinson had already arranged to transport the vessel. It had the metal work all lined up, except for the port-side pot rails. It had 4 workers available to work. They would all dedicate their time to completion of the vessel. Therefore, Atkinson, more likely than not, could have finished the vessel by on or about June 10 or 11. [ 103 ] That is 6 months from the hull delivery, which is itself within a usual completion time. I have considered that.

I have considered the delay caused by GC’s interference with Ricky Kinney and by the lobster season creating staffing challenges. I find that mid-June was a reasonable time for completion and Atkinson did bring the vessel to the point where, if all had proceeded without the June 8 events, resulting in Atkinson doing no further work on the vessel, it would have been completed by Atkinson within a reasonable time. ISSUE 4: WHO, IF ANYONE, BREACHED THE CONTRACT?

[ 104 ] At this stage, discussion of breach of contract will be limited to those alleged breaches which are advanced as constituting repudiation. It is not submitted that the alleged defects or deficiencies in construction amounted to repudiation. Therefore, those allegations will be addressed in Issue 11 dealing with deficiencies in the construction of the vessel. Atkinson Refusing to Continue Construction Until GC Advanced Half of Final Payment [ 105 ] Garrett testified as follows.

Near the end of the lobster season, Thelbert told him he could not continue working on the boat because Atkinson had run out of money. They needed to be paid half of the final 20% for them to continue working. GC agreed, in exchange for Atkinson signing over the rights to the boat. GC paid half of the final 20% in advance, even though the quote only required it to be paid upon completion of the vessel and sea trials. Atkinson signed over ownership of the vessel to GC. [ 106 ] Thelbert testified as follows. He told Garrett he needed money even though the quote did not call for an advance payment.

It is a common thing. It happens with almost every boat. Garrett initially said “no”, then he said he would pay in advance if Thelbert signed the Builder’s Certificate. Thelbert agreed to do so if Garrett signed the waiver, even though he generally does not sign the certificate in advance. He did not deny that he said Atkinson would not continue the construction if GC did not pay in advance. [ 107 ] Insisting on GC making a payment that was not yet due, before continuing construction, was a breach by Atkinson of the contract.

Atkinson Insisting on the Waiver Being Signed [ 108 ] Atkinson insisted on GC waiving any clam in relation to the extension to the aft of the vessel. It did so on the grounds that it was built for the lobster fishery and other commonly related fisheries only, not for scallop dragging, and would not withstand the weight of scallop dragging gear. [ 109 ] Garrett testified to the following. [ 110 ] He told Thelbert, during their first discussion about what he wanted to incorporate in the vessel, that he wanted a bigger hydraulic system because he would be using the vessel for scalloping.

He added that Thelbert said OK and that he would deduct the price. The implication of that evidence was that GC would supply the hydraulic system. [ 111 ] However, that is inconsistent with Garrett’s other evidence regarding the “extras” for the hydraulic system upgrade.

The information he provided Jameson Theriault, the marine surveyor, was that GC and Atkinson had come to a mutual agreement on a different hydraulic system after the contract was formed and construction was already underway. [ 112 ] It is also at odds with his evidence confirming that, at discoveries, during the discussion regarding informing Thelbert of the fisheries which he pursued, he did not say anything about hydraulics. [ 113 ] It is somewhat inconsistent with his evidence on cross-examination that his original plan was to use the vessel for lobster fishing and that he told Thelbert numerous times that he needed the vessel for lobster fishing; and, that he only mentioned to him in May that he would also need it for the scallop fishing season.

However, that inconsistency may be explained by the proximity of the lobster fishery, in comparison with the scallop fishery, which did not start until July. [ 114 ] In May 2016, after he had paid half of the final 20% instalment, and only a few days after he had agreed to do so in exchange for Thelbert signing the Builder’s Certificate, Thelbert asked him to sign full responsibility for the extension. Thelbert expressed his concern regarding using the extension for scallop dragging.

It is when Atkinson handed over the Builder’s Certificate that Thelbert mentioned the extension was not safe. [ 115 ] Garrett told Thelbert the extension could be made strong enough for scallop fishing. In June, he agreed to think about signing the waiver if the extension was strengthened. He and Thelbert discussed doing so. Thelbert did not say he was opposed to it; but, he did not offer any solution or say what he would do. [ 116 ] He did not recall whether that conversation happened before or after Thelbert signed the Builder’s Certificate. [ 117 ] However, the waiver document drafted related to any use.

Thelbert went to Garrett with the paper one day while he was working on scallop gear. However, Garrett did not read it that day. Garrett repeated to Thelbert that, if the extension was strengthened, he would consider signing the waiver. The first day he read it was on June 8, when the boat was ready to go in the water. [ 118 ] On June 8, 2016, the day Atkinson was getting ready to transport the vessel and put it in the water, he went to the boat shop. The vessel was in the neighbouring parking lot.

Thelbert approached him with the waiver regarding the stern extension; and, told him that if he did not sign it the vessel was not going into the water and that he was “done”. [ 119 ] Garrett said that was the first time he saw the paper. He must have meant that that was the first time that he read it, as he indicated it had earlier been presented to him. Otherwise, it is an inconsistency. [ 120 ] Garrett told Thelbert that he was not happy with the extension, was not signing anything, and was calling his lawyer.

Thelbert became angry and responded that the vessel was not going into the water and that he was returning it to his shop. Thelbert continued to refuse to bring the vessel to the water, without Garrett having signed the waiver, even after Garrett pleaded with Thelbert to do so. [ 121 ] Carl testified as follows. [ 122 ] He “assumed” they told Thelbert that the vessel was going to be used for scalloping because that is what they do. [ 123 ] On June 8, Thelbert insisted Garrett sign the waiver. Garrett refused. Thelbert stated that if Garrett did not sign he was “done”, and, was not going to finish the boat.

[ 124 ] Thelbert provided the following evidence. [ 125 ] The contract was to build a vessel for lobster fishing, even though he acknowledged the quote only expressed that it was a fishing vessel. All his boats are built for that purpose. They had mentioned that they may use it for other purposes. That is normal. However, he understood that to be fisheries like mackerel or long lining, as scallop fishing is not “a big thing” in the area.

There are only a couple of boats that pursue that fishery in the area. [ 126 ] It was not until about midway through the build, probably around the last of March 2016, that they told him they were thinking of using the vessel for scallop dragging. He suggested, then insisted, that they use the Lieutenant Dan instead, as it is a 45-foot steamship class vessel, which is a bigger and more solidly constructed vessel, with less overhang. [ 127 ] They responded that they would think about it. [ 128 ] The Have a Look at It had an 8-foot overhang.

Therefore, he was concerned about the weight that a scallop drag would put on it. He did not know how to build the overhang to support that kind of weight. Even a 5-foot overhang is not meant to be used for any type of dragging. He had no concerns regarding the extension if the vessel was being used for lobster fishing. [ 129 ] He agreed that when the extension was first installed it needed more stiffening, and that Garrett expressed concern. However, Garrett did not ask that it be strengthened. He only asked whether it was strong enough. Thelbert strengthened it at the end of the build.

They did not have a conversation with him regarding not being happy with the extension after it was completed. [ 130 ] It was around the first of May that he told them he did not like the idea of the 8-foot extension being used with the scallop drag as it was never intended for scallop dragging. Not a lot was mentioned after that. He continued building the boat and they would come to see what was going on. [ 131 ] On May 25, he asked Garrett whether he could pay half of the final payment.

Garrett insisted on having a signed builder’s certificate, and showed up the same day with a cheque in the amount of $45,772.75. A copy of that cheque is reproduced at page 81 of Tab 16 in Exhibit 1. [ 132 ] Thelbert agreed the cheque dated May 25 or 26 (it being difficult to decipher the number because it was corrected by marking over) was in exchange for the builder’s certificate. However, he did not arrange for Melvin Cottreau to show up with the builder’s certificate on the day that he did, June 2. That was a surprise to him.

His assistant, who was present, had not yet prepared the waiver, which he says Garrett had agreed to sign. He believed that Garrett had contacted Melvin. He signed the certificate and raised the question of the waiver. [ 133 ] That was the next time the question of the extension came up in detail. [ 134 ] Thelbert told Garrett that, if he was using the vessel for scallop fishing, he could remove the extension by unbolting it and put on the drag.

However, if he chose to go scallop fishing with the extension, he would need to sign the waiver, taking responsibility for the overhang. [ 135 ] It is not his usual practice to sign a builder’s certificate until he has received payment in full. [ 136 ] However, Garrett agreed to sign the waiver, once it was prepared, if Thelbert signed the Builder’s Certificate.

On that same day, Thelbert did sign the Builder’s Certificate prepared by Melvin Cottreau, and gave it to Garrett, expecting that he would sign the waiver when it was ready. [ 137 ] On the morning of June 8, he called and let them know the vessel was going in the water in the afternoon. He had arranged: to have Billy Harris truck it there; and, for a place at Westhead Wharf where it was to go directly in the water. They showed up that morning. He approached Garrett with the waiver document that had been prepared.

They refused to sign and drove away. [ 138 ] That was inconsistent with his evidence on cross-examination that it was in the afternoon that he asked Garrett to sign. [ 139 ] They also told him that they would be using the vessel for scalloping regardless of what Thelbert said. Prior to then, they had only expressed it as a possibility. [ 140 ] He called Garrett that afternoon to tell him the boat was ready to go to the wharf. [ 141 ] When Garrett arrived that afternoon, he asked him for the second time to sign the waiver, as he had promised to do.

He refused, stating his lawyer had advised him not to. [ 142 ] At that point, he told Garrett that, if he did not sign, he would not turn the vessel over to him. [ 143 ] When it was put to him on cross-examination that he did not deliver the vessel to the water because Garrett did not sign the waiver, he was initially evasive, stating that they had told him not to touch the boat, and told Billy not to move it. He then stated that it was pretty much because he was not fully paid. However, none of that made sense. GC wanted the vessel brought to the water.

The quote did not provide for full payment until the vessel was fully completed and the sea trials had been run. [ 144 ] When pressed further, he answered it was partly because Garrett did not sign the waiver, and partly because he was not fully paid. Then, he eventually agreed that he was not going to put the boat in the water unless they signed the waiver. [ 145 ] The initial contract did not require GC to sign such a waiver.

Therefore, unless GC and Atkinson entered into a subsequent agreement which included that such a waiver would be signed, insisting on it before turning over the vessel was a breach by Atkinson. [ 146 ] GC argues that the court should reject Thelbert’s evidence that GC signing the waiver was an agreed upon condition of him

signing the Builder’s Certificate because the following points do not make sense: (

a) Thelbert made arrangements for Melvin Cottreau to be present, and signed the Builder’s Certificate; but, he did not have the waiver ready to be signed at the same time, even though it is a very short document. (

b) Since the waiver was not ready, Garrett would have had to have agreed to sign a document he had never seen. (

c) Garrett would have to have agreed to advance half of the final payment without any conditions. (

d) Thelbert said that use of the vessel for scallop fishing was only noted as a possibility until June 8, yet he was insistent on the waiver prior to that. [ 147 ] Thelbert’s evidence, which was uncontradicted, was that he did not arrange for Melvin Cottreau to come to his office. His arrival was a surprise to Thelbert. He believed Garrett had contacted him. His assistant had not yet prepared the waiver. That is a reasonable explanation for why it would not be ready. [ 148 ] It is not unreasonable for a person to agree to sign a waiver in principle, without having seen the form of the waiver.

A dispute regarding whether the form of the waiver reflects what that person agreed to waive may arise. However, that is a separate issue which does not invalidate an earlier agreement to waive. [ 149 ] The sequence described by Thelbert was that: he first asked GC to make the advance payment; GC agreed on condition that Thelbert sign the Builder’s Certificate; Atkinson agreed to have the Builder’s Certificate signed if GC, in addition to paying the advance, also signed the waiver; and, GC agreed to provide both the advance payment and the waiver.

In the scenario described, GC would not have agreed to advance ½ of the final payment without conditions. [ 150 ] A waiver is to protect someone from the risk of a certain event happening. It would be reasonable for Atkinson to insist on a waiver even if only made aware that the vessel might be used for scallop dragging. [ 151 ] Even Garrett testified that the discussion regarding making the extension strong enough for scalloping may have happened before Thelbert signed the Builder’s Certificate. It was signed June 2, 2016. The advance payment cheque was dated May 25 or 26.

That was at the end of the lobster fishery, when according to Garrett’s evidence, things are more busy and fishers have to land their traps. Consequently, there was likely little time for further discussion between May 25 and June 2. Garrett’ evidence, which was partly conceded by Thelbert, was that GC had been expressing concerns about the extension since it was built.

Thelbert’s evidence, which was not contradicted by Garrett, and which I accept, was that he was informed in March that the vessel might be used for scallop fishing. [ 152 ] It would have been cleaner and clearer if all three parts of the purported subsequent agreement had been completed on the same day. However, none were completed on the same day. The advance payment was made May 25 or 26. The Builder’s Certificate was signed June 2. Thelbert approached Garrett with the waiver at some point after June 2, but before June 8, and again on June 8.

Therefore, the spreading out of fulfillment of purported obligations does not make it such that those obligations were not all part of the subsequent agreement. [ 153 ] Considering, those circumstances, it makes more sense that the advance payment, Builder’s Certificate and waiver would all have been part of the subsequent agreement.

The only after-the-fact discussion regarding the waiver was that, if Garrett was going to remove the extension when using the vessel for scallop-dragging, he may not need to sign the waiver. [ 154 ] Considering these points, I find that there was a subsequent agreement that Thelbert would sign the Builder’s Certificate early in exchange for GC advancing ½ of the final installment and signing a waiver taking responsibility for the extension if used for scallop fishing. [ 155 ] However, the waiver which Atkinson insisted GC sign is not limited to absolving Atkinson of responsibility for damage or injury arising from the use of the extension for scallop fishing.

It purports to absolve Atkinson of responsibility without limiting the waiver to any particular type of use. Therefore, the subsequent agreement did not justify Atkinson insisting on GC signing the waiver presented. [ 156 ] As such, in doing so, Atkinson breached the contract. Atkinson Refusing to Deliver the Vessel to the Wharf on June 8, 2016, After Carl Signed the Waiver [ 157 ] Garrett’s evidence was as follows. After Garrett and Thelbert had been discussing the waiver, Carl came over. He and Thelbert started yelling at each other.

Carl asked whether the vessel would be put in the water if he signed the waiver. Thelbert responded “yes”. Carl signed it and Thelbert went in the shop. Thelbert did not say anything about finishing the vessel. Garrett assumed Atkinson was not going to finish the vessel, as Thelbert had said he was done when Garrett refused to sign the waiver. [ 158 ] There is a video recording of a portion of the heated exchange between Carl and Thelbert. It was taken by Thelbert’s wife, Joyce Smith, on her cell phone. It shows mostly the feet of the people there.

The conversation in the recording is as follows: Carl: [Undecipherable yelling in distance (as Joyce is walking from the Boat Shop to where Thelbert, Carl and others are in the parking lot)] Joyce: There’s two sets of [undecipherable] right there. Carl: You think you own every boat? Thelbert: No, I don’t own no boat. Carl: Exactly, and you touch that fuckin boat – you touch that fucking boat – you just lay one finger on it …

Thelbert: You haven’t paid for that boat yet. Carl: That boat is in my boy’s name. That boat belongs to my boy. Male Voice: [Undecipherable] it [undecipherable] come right here and sit. Carl: You think lawyers cost a lot of money? You’re gonna find out, you call ‘em. Female Voice: Lifejacket [undecipherable] you never took off any. Thelbert: … Boat ain’t done yet. Carl: Exactly! Female Voice: And the cheques that was signed since March [undecipherable] Carl: And who’s gonna pay for that? Thelbert: The boat’s done on my end. Carl: You are. Thelbert: The boat’s done on my end. Carl: The what?

Joyce: The boat ain’t finished. Carl: You think I can’t build that fuckin’ boat? I can do 10 times the fuckin’ job you can. Thelbert: OK, get the fuck goin’. Carl: You think you’re fuckin’ hot shit. Thelbert: Get goin’. Carl: [While walking away] Don’t you fucking worry, that boat will be goin’ in the water with or without your permission. Joyce: [To Thelbert] That’s theft isn’t it? Carl: [Having walked away some distance] I’ll tell you, if you were smart, you would convince Billy to put that boat in the water right now. Joyce: He thinks you’re not smart. Carl: Or else it’s gonna cost you a lot of money.

Joyce: Don’t say a word, don’t say a word Thelbert. Carl: [In distance – undecipherable] Joyce: [Undecipherable] recording [undecipherable] [ 159 ] Garrett testified that the video recorded the very last exchange; and, at that point, the truck driver had already indicated he would not move the vessel because he did not want to get sued.

He testified that the video was after Carl had signed the waiver, and that, at that point, Carl had told Thelbert not to touch the boat. [ 160 ] Garrett also said that Carl did not sign the waiver on behalf of GC. [ 161 ] Carl testified as follows. [ 162 ] After Garrett refused to sign the waiver, Thelbert said he was not going to finish the boat and told the truck driver to back up to the boat and return it to Atkinson’s property. That is when the discussion became argumentative. He and Garrett were trying to get Thelbert to put the boat in the water. Thelbert refused.

Carl, while the truck was backing up to the boat, asked Thelbert whether he would put the boat in the water if he signed the waiver. Thelbert responded that he would. Carl signed the paper. Thelbert’s wife, Joyce, took the paper to take a photograph of that. Thelbert grabbed it from her. [ 163 ] The exchange caught on video occurred after that. At that point, they had already been discussing the matter 15 to 20 minutes. Even after he had signed the paper, Thelbert refused to release the vessel.

He was upset as he had had enough of Thelbert’s treatment. [ 164 ] Joyce testified as follows. [ 165 ] Having removed the Take a Look at It from its shop, Atkinson had been rearranging the partially constructed vessel and new hull in the shop. Garrett and Carl showed up in the morning. At first, the conversation was civil. [ 166 ] Thelbert asked Garrett to sign the waiver. Garrett refused. They left. Atkinson continued rearranging the boats in their shop.

Garrett and Carl returned and an argument ensued. [ 167 ] Carl was doing a lot of screaming and swearing. He kept poking Thelbert in the chest with his finger. Thelbert kept telling Carl that if he could get Garrett to sign the waiver everything would be okay. She told Carl that he only had to get Garrett to sign. Carl came to her, put his finger under her nose, and said: “who the F are you?” At that point, she retrieved her phone from the boat shop and started recording. Carl was still swearing and “fighting”. [ 168 ] She identified Tab 11 of Exhibit 1 as being the waiver signed by Carl.

She stated that, after the video, he had started to walk away, then came back and grabbed the paper from Thelbert, signed it and threw it at her. [ 169 ] She added that the end of the video recording was not the end of the argument. It continued where the truck was parked under Garrett’s boat. That additional

part lasted 10 to 15 minutes. Then the police arrived. [ 170 ] On cross-examination, she agreed that Thelbert had told Carl that he was putting the boat back in Atkinson’s yard.

However, she didn’t think Carl had signed the waiver when Thelbert said that. [ 171 ] She agreed that when Carl told Thelbert not to touch the boat was after Thelbert had said he was moving the boat back to Atkinson’s yard. [ 172 ] Thelbert provided the following evidence. [ 173 ] After Garrett again refused to sign the waiver the afternoon of June 8, and Thelbert responded by saying he would not turn over the vessel, “all hell broke loose”. They started swearing and pointing in his face.

They stated the vessel was not his and he could not approach the boat or go on it, and was not to touch it. [ 174 ] He tried to talk to Garrett without Carl present as Garrett was being kind of reasonable and Carl was the biggest problem. [ 175 ] However, Carl came back and got in his face again, poking his finger on his chest. [ 176 ] Thelbert then asked the driver to bring the boat back to the Atkinson lot because that was his only window of opportunity to do so. [ 177 ] At that point, Carl said that he would sign the waiver. He grabbed it from Thelbert’s hand. Thelbert told him it was for Garrett to sign.

Carl insisted on signing and threw it towards Thelbert. Thelbert went to pick it up. Carl’s wife did as well as she wanted to take a photo of it. [ 178 ] Thelbert told Carl it was for Garrett to sign. [ 179 ] When he was asked whether that was before or after the video, following a long pause, he stated that it was after. That was consistent with his wife’s evidence on the point. [ 180 ] He was not sure whether Garrett had already boarded the truck and threatened to sue the driver when Carl signed the waiver.

However, he recalled that when he went to direct the driver to hook onto the boat, that is when Carl grabbed the waiver and signed it. [ 181 ] When being questioned about having, a couple of weeks later, put up signs saying Garrett owed him money, Thelbert stated that Garrett had said to him, on June 8, while they were standing by the truck: “Do you honestly think I am going to pay you?” [ 182 ] There is a clear dispute in relation to whether the videotaped portion occurred before or after Carl signed the waiver.

Garrett’s evidence that Thelbert went in his shop after it was signed supports a finding that it was after. However, it is unnecessary to resolve that dispute for the following reasons. [ 183 ] I accept Garrett’s evidence that Carl did not sign the waiver on behalf of GC. Garrett who was GC’s principal, was present and refusing to sign. Therefore, at that point, Carl could not have had even ostensible authority to sign.

As such, if Atkinson had been justified in insisting on the waiver, it would have been justified in requiring it to have been signed by Garrett; and, Carl signing it would change nothing. [ 184 ] I have already found that Atkinson was not justified in insisting that GC sign the waiver as drafted.

Therefore, it was not justified in refusing to continue with the completion of the vessel, irrespective of whether anyone signed it; and, by refusing to do so, it breached the contract. [ 185 ] The refusal to deliver the vessel to the water that day is not necessarily a breach, as there was nothing in the contract requiring it to be delivered that day. It only had to be completed within a reasonable time.

The refusal to deliver: would cause delay, as the vessel had to be delivered for construction to be completed; and, reinforced Thelbert’s statement that Atkinson was done. [ 186 ] However, this chaotic exchange on June 8, which Thelbert described as “all hell breaking loose”, is relevant to assessing whether there has been a repudiation of the contract. I will discuss that under the next issue.

GC Forcibly Seizing the Vessel on June 8, 2016 and Making it Such That Atkinson was Unable to Continue Work on the Vessel [ 187 ] Garrett testified to the following. [ 188 ] After Thelbert told him that, because he would not sign the waiver, the vessel would not be brought to the water and would be returned to his shop, Thelbert walked towards the truck driver. Then, he, himself, approached the truck driver and told him that the vessel was his and that it was not to go back in the shop, or he would sue the truck driver.

[ 189 ] He told Thelbert not to touch the boat anymore, when Thelbert threatened to put it back in his shop, because he was concerned about being able to get it in the water. [ 190 ] He went aboard the vessel and put locks on it. [ 191 ] The vessel remained in the parking lot adjacent to Atkinson’s shop (the Paturel Parking Lot) for about two weeks. During that time, GC arranged for Nova Scotia Power to lift the lines and for the permits required to move the vessel to the water. Nova Scotia Power raised a concern about ownership.

He provided the Builder’s Certificate and was able to bring the vessel to the water. [ 192 ] They delivered it to the Westhead Wharf. [ 193 ] Thelbert showed up a few times and watched them. [ 194 ] Garrett agreed that he never asked Thelbert to fix any of the problems with the boat. [ 195 ] Carl testified as follows. [ 196 ] At the point where, during the videotaped exchange, he told Thelbert not to touch the boat, he felt that he should do so because of the dispute they were in from a legal standpoint and because he had had enough of Thelbert’s treatment of Garrett. [ 197 ] He added that he meant he did not want Thelbert to bring the boat back on Atkinson’s property and make it inaccessible to them. [ 198 ] When it was suggested to him that Thelbert was not going to be allowed to finish the vessel, he responded by saying that was after Thelbert had refused to finish it.

He agreed that, at that point, they did not want Thelbert to finish the work. He did not ask Thelbert to finish it and he did not hear Garrett do so. They did not ask Atkinson to fix any deficiencies. [ 199 ] Thelbert was asked what he thought Carl meant when he told him not to touch the boat. He responded that it meant not to touch it and added the following. [ 200 ] He told Carl that the boat was not finished. Carl responded by saying he could do 10 times the job Thelbert did. He took that to mean that he could finish the boat himself. [ 201 ] Thelbert told the truck driver to put the boat on the truck.

However, Garrett had already boarded the truck and threatened to sue the driver if he did. [ 202 ] Garrett and Carl also locked up the boat and told Thelbert not to go aboard.

They told him they had cameras on it so that they could see him if he did so. [ 203 ] After he was told not to touch the boat, Atkinson’s work on it came to a complete halt. [ 204 ] Thelbert never offered to do any further work on it and did not receive any request to fix anything after the parking lot issue. [ 205 ] His usual practice, if a buyer says something is not installed properly or does not fit properly, is that he goes and fixes it at no charge. [ 206 ] Thelbert also provided the following evidence. [ 207 ] Around June 30, 2016, he went to a welding shop.

When he walked out, Garrett, who was driving in front of the shop in a black truck, raised his middle finger and had a big smile on his face. It surprised him that Garrett would do that, given that he still owed him over $28,000. After pondering on what to do, he proceeded to the wharf. There, he asked Garrett why he would give him the finger when he had just built him a nice boat and he still owed money on it. Garrett jumped aboard his boat. Thelbert turned to leave, while still trying to talk to Garrett.

Garrett gave him a double finger and told him he was not scared of him. [ 208 ] Then Carl came off the boat, across the parking lot and grabbed Thelbert by the throat through the window of his truck. He went to punch him but stopped three quarters of the way through, and spit in his face.

Carl asked him what he was going to do about that. [ 209 ] There is an implied term of every building contract that the owner will allow the builder access to the jobsite to complete construction, unless the builder has repudiated the contract and the owner has accepted that repudiation. [ 210 ] GC’s actions denied Atkinson access to the vessel to complete its construction.

As such, unless Atkinson’s actions amounted to repudiation which GC accepted, such denial of access was a breach of the contract. [ 211 ] The question of repudiation and mutual repudiation will be discussed under Issue 5. [ 212 ] If there was mutual repudiation, both parties would have been in breach, and neither would have been the innocent party. [ 213 ] Allowing access to rectify deficiencies, to the extent reasonable, is also relevant to the question of mitigation of damages: Rocksolid v. Bertolissi , 2013 ONSC 7343 , at paras 91 and 92 .

ISSUE 5: DID ANY BREACHES AMOUNT TO REPUDIATION OR MUTUAL REPUDIATION? [ 214 ] In White v. E.B.F. Manufacturing Ltd. , 2005 NSCA 167 , at paragraphs 88 to 91 , the Court described repudiation as requiring both of the following: (

a) The repudiating party has clearly communicated, explicitly or implicitly, “by words or conduct” that they no longer intend to perform

their side of the contract. Factors to consider include “the nature of the contract, the attendant circumstances, and the motives whichprompted the breach”. (

b) The innocent party has clearly and unequivocally communicated that they accept the repudiation. “Mere inactivity or acquiescence”is generally insufficient. However, depending on the “contractual relationship” and “circumstances of the case”, “a continuing failure toperform [may] be sufficiently unequivocal to constitute acceptance of a repudiation”. [215] As stated at paragraphs 15 and 16 of 968703 Ontario Ltd. v.

Vernon, (ON CA), 2002 CarswellOnt 573(C.A.), with references omitted: “15 … Only a substantial, not a minor, breach of contract will excuse the innocent party from continued performance of a contract … . 16 There are several factors that provide guidance in determining whether or not a breach is a substantial breach justifying future non-performance of the innocent party's obligations. They are: (

a) the ratio of the party's obligation not performed to the obligation as awhole; (

b) the seriousness of the breach to the innocent party; (

c) the likelihood of repetition of the breach; (

d) the seriousness of theconsequences of the breach; and (

e) the relationship of the part of the obligation performed to the whole obligation.” [216] “It is clear that as a matter of law a party may be held to have repudiated a contract even when that party professes a continuingdesire that the contract be carried out, and even when the party may honestly believe that he wants the contract to be carried out. The testis an objective one.” [Komorowski v.

Van Weel, 1993 CarswellOnt 856 (C.J., G.D.), at para 35.] [217] Demanding payment before it is due, accompanied by a refusal to complete the construction phase required to demand suchpayment, may constitute repudiation, disentitling the builder from recovering payment: D & M Steel Ltd. v. 51 Construction Ltd.,2016 ONSC 1335, paras 58 to 62. However, the builder may still be able to prove a quantum meruit claim: Heyday Homes Ltd. v.Gunraj, 2004 CarswellOnt 254 (S.C.J.), para 353. [218] The Court in Jozsa v.

Charlwood-Sebazco, 2016 BCSC 78, at paragraph 73, stated: “73 Even where an owner terminates a contract, the owner can still counterclaim for defective work: Keating on Construction Contracts,at p. 293. However, the contractor has the right to remedy any defects in the work himself, and if he is deprived of that right the owner'sright of set off may be curtailed: Wiebe v. Braun, 2011 MBQB 157 (Man. Q.B.), at para. 32. As stated in Obad v. Ontario HousingCorp., [1981] O.J. No. 282 (Ont.

H.C.), at paras. 47-48: 47 With reference to the counterclaim or claim of set-off for damages arising from non-completion of the work, the effect of thedefendant, Ducharme, telling the plaintiff to "get off the job" was to revoke the plaintiff's license to continue working there.Furthermore, in a practical way, engaging other persons to do the work of the plaintiff, effectively prevented the plaintiff fromcompleting his contract.

The defendant, Ducharme, having thus prevented completion cannot obtain damages for failure of the plaintiffto complete. 48 With respect to the claim for damages resting on expenditures to correct the plaintiff's work, it would seem that, although thedefendant, Ducharme, is entitled to have a set-off for defective work, its obligation to mitigate its damages would require that it allow theplaintiff to continue, having in mind the reasonable probability that the plaintiff would correct its own work in order to obtain payment ofthe price.

On that basis the defendant, Ducharme, is not entitled to have damages based on its own costs of correction.

Alternatively, theplaintiff was obliged to correct its defective work and the defendant, Ducharme, having prevented the plaintiff from fulfilling thatobligation, cannot have damages in the ordinary way based on its having undertaken itself to carry out such corrections.” [219] These passages indicate that preventing access to the jobsite and hiring third parties to complete the work contracted for canconstitute repudiation, and affect the measure of damages to correct deficiencies. [220] Failure to pay amounts due may constitute repudiation, and refusal to continue work thereafter may constitute acceptance.

In sucha case, the builder is entitled to compensation for work performed on a quantum meruit basis: Leo Gushue Construction Ltd. v.Thistle, 1990 CarswellNfld 47 (S.C., T.D.). [221] The innocent builder, having accepted repudiation by non-payment, need not complete the construction to be entitled tocompensated for the value of work performed: Sydney Boat & Manufacturing Co. v.

Gillis, 1908 CarswellNS 97 (S.C.). [222] In the case at hand, the amount allegedly owing to Atkinson was paid in trust pending determination of actual amounts owing.Therefore, no repudiation by non-payment was argued and none occurred. [223] Even where a completion within a reasonable time is a very important aspect of the contract, there may be a need to give thebuilder notice that the contract will be terminated if the build is not completed by a specified (and reasonable) time: Absolute GeneralContractors Ltd. v. E. & W.

Aluminum Products Ltd., 2010 ONSC 145, paras 63 to 67. [224] “Mutual hostility” and inability to restore a working relationship may amount to mutual repudiation and acceptance that thecontract is terminated. In such a case, the builder may recover the contract price less the value of work not completed and less the cost ofremedying deficiencies: Economark Renovations Ltd. v.

Hecht-Kugelmass, 1993 CarswellOnt 3143 (C.J., G.D.), paras 52 to 54. [225] GC submits that Atkinson repudiated the contract by wrongfully insisting on the waiver being signed, and, also by refusing tocontinue construction and deliver the vessel to the wharf, on June 8, 2016, after Carl signed the waiver. [226] Atkinson submits that GC repudiated the contract by forcibly seizing the vessel on June 8, 2016 and making it such that Atkinsonwas unable to complete the construction. [227] In the alternative, it argues there was a mutual repudiation by both parties.

[228] I have already outlined my findings in relation to the events of June 8.

I also accept Thelbert’s evidence that, on June 8, Garrettdid say to him something to the effect of: “Do you really expect me to pay you?” I further accept that Atkinson would have finished thevessel and fixed any deficiencies if GC had asked and apologized for Carl’s behaviour on June 8. [229] The refusal by Atkinson to deliver the vessel to the water and continue construction was prompted by GC’s: failure to sign awaiver as it had agreed to do; taking over the vessel and prohibiting Atkinson’s access to it; and, its statement that Atkinson could notexpect to be payed any more money. [230] The refusal by GC to allow access for completion and pay further monies was prompted by Atkinson’s insistence on the waiverand accompanying refusal to deliver and complete the vessel. [231] Although Carl did tell Thelbert that if he was smart he would deliver the vessel to the water, he also told him not to touch the boatand that Atkinson would be paying for its completion.

That clearly communicated that, even if Atkinson delivered the vessel to thewater, GC would get someone else to complete it. [232] I found that Carl was not GC’s agent for the purpose of signing of the waiver, because of Garrett’s refusal to do so. However,Carl had been negotiating on behalf of GC throughout, and the position he was taking on June 8 was consistent with Garrett’s.

Therefore,his ostensible authority to represent GC’s position continued in relation to the comments regarding Atkinson not accessing the vessel andpaying for its completion. [233] Until June 8, the parties had been working through respective concerns. On June 8, hostility erupted and they quickly reached animpasse. Both clearly communicated that they no longer intended to perform their side of the contract. They were unable to engage infurther discussions to restore a working relationship. [234] There was no innocent side.

Both acted unreasonably and contributed to the impasse. [235] Had they engaged in further discussions, they may have been able to resolve the disputes which led each side to refuse to fulfilltheir remaining obligations under the contract.

Given the level of construction and payment that had been reached, the disputed itemswould not have amounted to fundamental breaches, which could not be resolved. [236] GC’s outright refusal to sign the waiver without discussing a change to its wording, was a breach of the subsequent agreement.However, the waiver, even if it had been properly worded, did not need to be signed that day. It was an element of the subsequentaddition to the contract that could have been addressed following delivery and completion, either through a negotiated settlement orlitigation.

Conversely, GC could have signed the waiver on the basis only that it was done so that Atkinson would deliver the vessel tothe water and complete it, and that if it was determined that no such agreement to sign the waiver existed, it would be invalid. Thequestion would only need to be resolved or determined before a potential claim related to the extension was determined. Therefore, therewas no urgency. It was a small part of the overall contract. The refusal to sign it would not amount to repudiation.

It would not justifyAtkinson refusing to continue. [237] The working relationship between the parties fell apart because of the unresolved dispute over the extension and associatedwaiver. As stated by Garrett, it “caused this whole mess”. [238] In addition, the obligations remaining to be completed by each side were such that, in the circumstances, failure to perform themby one side or the other would not have constituted a fundamental breach. I say that for the following reasons. [239] Only 10% of the contract price, plus extras, was left to be paid. That is a small proportion of the overall contract price.

It,combined with complaints over deficiencies, such as the extension and others which will be discussed, signalled a dispute overentitlement to payment, not in itself, repudiation. [240] After 6 months of construction, Atkinson only had about two more days of work required to complete the construction, a verysmall proportion of the work.

Plus, Atkinson was prepared to complete it if it had been asked. [241] In the circumstances, neither side committed a fundamental breach. [242] It is their inability or unwillingness to restore the working relationship which resulted in mutual repudiation and acceptance. [243] Therefore, Atkinson may recover the contract price, less the value of uncompleted work and reasonable costs of remedyingdeficiencies. ISSUE 6: DID GC WAIVE ANY CLAIM RELATED TO THE EXTENSION? [244] Atkinson argues that Carl signed the waiver related to the extension on behalf of GC.

Therefore, GC is barred from making anyclaim related to the extension. [245] The Supreme Court of Canada, in Saskatchewan River Bungalows Ltd. v.

Maritime Life Assurance Co., (SCC), [1994] 2 S.C.R. 490, at paragraphs 19 and 20, set out the following principles related to waiver in a contractual context: 19 Waiver occurs where one party to a contract or to proceedings takes steps which amount to foregoing reliance on some knownright or defect in the performance of the other party … . 20 Waiver will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) anunequivocal and conscious intention to abandon them.

The creation of such a stringent test is justified since no consideration moves fromthe party in whose favour a waiver operates. An overly broad

interpretation of waiver would undermine the requirement of contractualconsideration.

[ 246 ] Carl testified that he has no involvement in GC. However, he attended a few of the meetings between Garrett and Thelbert. [ 247 ] Further, Garrett testified that Carl did not sign the waiver on behalf of GC. In his view, Carl signed it on his own behalf. [ 248 ] He said he was not sure if Thelbert wanted just anyone to take responsibility. However, the waiver document indicates that it is between Atkinson, on the one side, and Garrett and GC on the other. Therefore, it would not make sense that Thelbert would be looking for just anyone to sign.

It would only make sense that he was looking for a signature that would bind GC. [ 249 ] Garrett and Carl testified that a condition of Carl signing the waiver was that Atkinson would deliver the vessel to the water. That was not done. [ 250 ] Carl testified that he did not recall reading the waiver; but, knew what it was for. He knew is was for Garrett to take responsibility for the extension. [ 251 ] He agreed that he would take responsibility if Thelbert put the boat in the water. [ 252 ] Garrett was the president and sole owner of GC. Thelbert knew that. Garrett was present and refusing to sign the waiver.

Therefore, even if GC previously acted so as to give actual, implied or ostensible authority to Carl to contract on its behalf, in the circumstances, it was clear that any such authority would not extend to signing the waiver on behalf of GC. Thelbert recognized that, as he sought to retain the vessel until Garrett signed. [ 253 ] I find that Carl was not authorized to bind GC and the condition on which he signed the waiver was not fulfilled. Ther

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